Australia’s Ampol Ltd on Monday said it had a strong start to 2023 and was well-positioned to manage ongoing volatility in oil markets after soaring prices of refined products boosted its 2022 profit to a record level, allowing it to declare a bumper dividend.
Ampol, the country’s top fuel supplier, said refined product markets in January were strong, with its Australian fuel volumes and convenience retail trading improving last month compared with the COVID lows.
“Ampol has had a strong start to the year and is well positioned to manage the ongoing volatility in global markets.”
“Longer term, Ampol’s operations are well positioned to capture opportunities in the liquid fuels value chain,” the country’s biggest fuel supplier said as its fuel retailing unit clocked a nearly three-fold jump in operating earnings.
For the year ended Dec. 31, Ampol’s net profit after tax from continuing operations jumped to A$732.3 million ($502.43 million) on a replacement cost (RC) basis, compared with a A$297.8 million profit last year.
It beat a Refintiv estimate of A$728.9 million.
It also declared a final ordinary dividend of 105 Australian cents per share, up from 41 AU cents last year. It also declared a special dividend of 50 AU cents apiece.
Ampol and smaller peer Viva Energy – operators of Australia’s two refineries – have both benefited from stronger prices for refined products, bolstered by higher demand amid a recovery in air travel, and limited supply from China.
“Strong operational performance and the ability to secure sufficient crude supply through our international sourcing team, meant Lytton captured the elevated refiner margins available in 2022,” Ampol said.
The Lytton Refinery, operated by Ampol with government support until at least 2027, recorded earnings before interest and tax (EBIT) from continuing operations of A$686.7 million for the year on a RC basis, compared with A$158.7 million last year.
Ampol’s Fuels and Infrastructure (F&I) unit recorded EBIT from continuing operations of A$853.0 million on a RC basis, up nearly 180% from a year ago, with the unit expected to benefit from the demand recovery in jet fuel as COVID restrictions go away.
However, the fuel retailer flagged geopolitical factors including Russian sanctions and China product export decisions that are likely to continue influencing crude and refined product markets during 2023 and in the medium term.
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Month-on-month, the demand was up 13.6 percent, reversing the dip in the previous month. Sales had fallen 5.1 percent month-on-month in January as cold conditions cut vehicular movement. Diesel, the most used fuel in the country, posted a near 25 percent rise in sales during February 1-15 to 3.33 million tonnes, as compared to the same period last year. Consumption was up 16.7 percent over the first half of February 2021 and 7 percent higher than 2020.